INTRODUCTION

FP&A is in a state of continuous change, driven by more data, increased demands, expanding capabilities, and AI advancements. As we face the challenges, opportunities arise for finance leaders to better optimize across people, processes, and technology. This whitepaper explores key trends shaping FP&A in 2025, their impact on finance teams, and the initiatives leaders can pursue to take advantage. 

THREE PREDICTIONS SHAPING FP&A IN 2025

1. Structured replications is the top data theme for FP&A in 2025
2. ERP Vendors will split into two groups based on data access philosophy
3. Agentic AI adoption faces a new hurdle, through one which triggers FP&A's catch up

FIRST WATER THOUGHT LEADERSHIP

First Water is committed to collecting finance community input and data benchmarking from the to shape thought leadership content and solution innovation. Whether through whitepapers, articles, or virtual and live events, we constantly seek the dialogue that helps us improve the quality and speed of dialogue in the organizations we serve.  

So don't just take our word for it. Through our strategic partnership with The CFO Alliance, our FP&A predictions are informed by the 2025 CFO Alliance Global Mid-Market Sentiment Report, with insights from 350+ CFOs. Here are just a few of the relevant data points from this year’s report:

• 53% of CFOs identify technology upgrades and automation as the target for incremental budget, recognizing that pivotal role these advancements play in enabling their teams and organizations
  
• 45% cite data integration or visualization as a 2025 initiative, highlighting growing importance in seizing control over data through centralization and flexible access
• With 24 FP&A platforms and 30+ Accounting / ERP systems in use across respondents, managing disparate systems and incremental additions is now a core Finance responsibility
• 40% identify FP&A as a top 3 team skill gap, along 42% citing technology experience, showcasing internal gaps organizations endure while trying to move the needle on Finance advancements

Finance leaders face critical questions across the board, balancing the constraints of current resources, the known unknowns of rapid technology advancement, and increasing stakeholder demands from Finance.

One goal is crystal clear – we need our Finance teams maximizing their time within the highest-value activities to maximize impact on organizations and extend stakeholder reach.

This speaks to the great Finance paradox of 2025 - teams must become more technical to ultimately spend less time being technical. 

Download the CFO Alliance 2025 Global Mid-Market CFO Sentiment Report

How will we get there? It starts with Finance teams establishing data maturity and FP&A capability roadmaps that span internal teams, alternative resourcing models, and technology solutions to solve pain points, deliver ROI, and flexibly set organizations up for a future we know looks different from today. With existing tools and systems evolving, and new options continuously expanding, Finance leaders and teams must stop and take stock with the realization that it is near-impossible to stay on the leading edge of everything.

Read on for insights and bold predictions for the direction of FP&A in 2025 and beyond!

There’s little debate that most company tech stacks have increased in recent years, some materially so. This is true whether or not a company is utilizing a primary ERP platform, and larger stacks have increased overall fragmentation of data across organizations. For acquisitive companies, such as private equity-backed roll-up strategies, the impact is particularly acute as add-on acquisitions bring their own systems and data, and immediate transition or integration is often not achievable. Yet, the demands on information flow and forward visibility do not stop!

Managing multiple systems and disparate dataset is thus a recurring need, with the ability to efficiently add new sources into the FP&A ecosystem deemed a badge of honor for elite Finance teams.

Download the CFO Alliance 2025 Global Mid-Market CFO Sentiment Report

The solution? Structured Replication, which is the copying, mirroring, and/or versioning of system data or incremental changes into a central repository (the ‘replication’), through a process that is controlled and recurring (the ‘structure’).

Not only do we see Structured Replication as the most valuable data theme of 2025, for reasons outlined below, but also as a distinct phase of the data maturity spectrum.

Let’s highlight the distinct benefits and advantages of Structured Replication:

The ERP landscape is undergoing its own transition on two fronts, driven by increased data connectivity becoming less complicated and more cost-efficient (and for which a multitude of integration platforms have risen up to address). First, the established mega-ERP players are facing competition from niche platforms specifically designed for industries or use cases. For customers, these platforms are often cheaper and face less implementation burden as they are more configured out of the box for their needs (a prime reason for their selection). The rising tech stacks and tools that Finance teams seek to utilize demand data access, and for the supermajority of organizations utilizing an ERP, that ERP is the primary data repository. 

While perhaps less of a hot take or bold prediction, we believe 2025 will be the year where we get our first “Rogue Agent” in a prominent company, leading to substantial financial losses in a short period of time. Emerging to mid-market leaders will be shaken by the development, knowing they lack the same talent, team, and financial resources of their larger brethren. Such an event will have three effects:

The landscape of Finance and FP&A will continue to evolve based on technological advancements, evolving resourcing models, and increasing demands from stakeholders from Finance. Key predictions include the rising prominence of Structured Replication, a shift towards more open architecture in ERP systems, and a bumpy road ahead for agentic AI (but with potential knock-on benefits for FP&A).

YOUR NEXT STEPS

To navigate this evolution, Finance leaders must get proactive or risk falling behind the curve. Note this does not demand being a first mover or early adopter of leading-edge technologies.